1. All of the following are items that cause a difference between the bank balance and the book balance except

A. canceled checks

B. NSF checks

C. bank service charges

D. deposits in transit

2. In a bank reconciliation, a $400 NSF check is

A. deducted from the ledger balance.

B. deducted from the bank balance.

C. added to the ledger balance.

D. ignored.

3. After preparing the bank reconciliation, journal entries must be prepared for

A. any errors made on the books or omissions revealed by the bank reconciliation.

B. any errors made by the bank revealed by the bank reconciliation.

C. only outstanding checks.

D. only deposits in transit

4. Internal controls is the system of policies and procedures that is designed to

A. encourage adherence to management policies.

B. provide for accurate accounting data.

C. protect assets against fraud and waste.

D. All of the above.

5. Which of the following represents good internal control procedures concerning Cash?

A. Make sure that all cash payments are made by check.

B. Cash should be deposited only at the end of the month.

C. Designate a specific employee to open mail, handle cash, and record the cash.

D. Assign an employee responsibility of preparing the checks, signing the checks, and preparing the bank reconciliation.

6. Hooper Vacuum Sales & Service shows a balance of $360 in the ledger for Cash, but the bank statement shows a balance of $460. The $100 difference may be caused by

A. an outstanding check for $100.

B. a deposit in transit of $100.

C. an NSF check for $100.

D. a debit memo for $100.

7. Hooper Vacuum Sales & Service shows a balance of $360 in the ledger for Cash, but the bank statement shows a balance of $460. The $100 difference may be caused by

A. an outstanding check for $100.

B. a deposit in transit of $100.

C. an NSF check for $100.

D. a debit memo for $100.

8. Which of the following does not affect the bank balance?

A. deposit recorded for the wrong amount in the ledger

B. deposit in transit

C. outstanding check

D. bank service charge

9. Which of the following is not an example of an internal control system?

A. Keep petty cash locked up under one person's control.

B. Make daily deposits

C. Prenumber checks

D. Maintain separate duties between cash handling and cash recording

10. The following items in a bank reconciliation should be adjusted in the ledger balance of cash except

A. deposit in transit.

B. bank service charge.

C. debit memo for NSF check.

D. interest earned on account balance.